Time to put Thames Water out of its misery

Open the Editor’s Marking Free

Rulla Khalaf, the FT editor, chooses its preferred stories in this week’s news.

It has been another tangled week for the water of the Tem. Thousands of southern London customers remained without explosion of water pipeline. Financial times Gives: Half of the utility sewer plants are lacking pipes and tanks, enough waste water to get a leading unpacked drain in rivers and waterways. Debt truck utility complaint By 2030, customer accounts are even more than 35 percent that allowed it to be offered to court £ 3bn creditor fee. It is time for the company manifested its misfortune through special management mode (SAR) – temporary recovery.

Thames waterwhich contains a quarter of the British population, a poster-child for the failure of the experience by England, with the privatization of former public regional water companies, which in 1989. Even more than it happened to many colleagues, he returns his balance to the pagan to maximize the return.

Adjusting focus on consumer prices and operating entity, not on top of Arcane corporate structures, proved insufficient. Because Thames Water’s Jouse’s rising in 2023 caused funding problems in 2023, the debt was swindenly twined.

This month has been a high court judge Hearing arguments The proposed reconstruction program, which includes 3 billion pounds of loan bonds, which include US fence such as Elliott Management. Funding is a sharp 9.75% interest rate, it is planned to provide a “bridge” to a wider reconstruction, allowing time to raise new capital and processing debts. It is envisaged that the judge will publish his decision this week whether the plan meets corporate legal requirements. If he rejects it, Thames Water stated that it will free from cash to March 24, so it will almost inevitably go to special management, then the first Water Company of England. privatizationA number

Even if 3 billion pounds are given, there is no guarantee that new capital investments will be provided. The Chief Financial Respondent told the court that it is expected to reach 800 million pounds next year, including new loan costs and lawyers and consultants. £ 200 MillionThe Liberal Democratic MP, representing a number of environmental preachers, says one-third Thames Water ‘Customer accounts have already gone to serve its debt.

Then there is a strong argument, that administration is in the best interests of the 16 MH customers of the company, and in any case it can be the final destination. The SAR process is designed to allow managers to impose creditors to reduce balance and rebuild the company to be viable for the future. Thames leaders will be released, the turning actions to focus. The goal should be to return the Tempin to the market as a stable, private firm.

Critics have even proposed even temporary repair expensive for the government. But the debt interest rate will be frozen, cash will attract infrastructure. Conservative and labor governments have worried that it has imposed losses on investors, some from abroad, will prevent important investments in other infrastructure projects. But the insolvency process is a normal part of capitalism, to ensure effective assets can be maintained and restarted. In this case, this will be the best way to complete the sensation of incorrect management, financial engineering and ineffective settlement and maximize the developing opportunities for sound business.